European stocks climb after Asian gains

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PARIS: European stock markets sprinted ahead Monday, powered by strong gains in Asia, with Frankfurt breaking through the 6,000-point barrier and Paris closing in on 4,000 points.

Trading volumes were thin in post-Christmas exchanges and the London market was closed for a holiday.

The advances in Europe followed a solid performance in Asia, where Tokyo s Nikkei-225 index added 1.33 percent to close at 10,634.23, its best finish since Aug. 26, on the back of a weaker yen and upbeat economic data.

The German Dax index of leading stocks breached 6,000 points as trading began on Monday, the first time it had reached the benchmark since Sept. 26, 2008.

The index opened at 5,977.99 points but moved to 6,001.38 points in early trade. By mid-day it was up 0.74 percent at 6,001.43.

Shares in the biggest German energy group, E.ON, rose 2.28 percent to lead the gainers while auto maker Volkswagen added 1.40 percent.

In Paris the CAC 40 had risen 0.72 percent to 3,940.95 from Thursday s close while the Eurostoxx index of leading eurozone shares was up 0.76 percent at 2,979.83.

The Paris market last week recorded consecutive daily gains from Monday to Thursday, ending the period at its highest level for 15 months.

Market watchers said the 4,000-point threshold could be reached later this week. But analysts cautioned that the advance would likely reflect weak trading volumes rather than increased confidence in global economic recovery prospects.

Nuclear energy group Areva fell 2.74 percent in early Paris trade after a French industrial alliance was passed over by the United Arab Emirates in bidding for the construction of four nuclear power plants.

The UAE awarded the $20.4-billion contract to a South Korean-led consortium, the Korea Electric Power Corporation (KEPCO).

Areva had been joined by France s top energy firms, EDF, GDF-Suez and Total, along with engineering giants Vinci and Alstom to present the bid.

EDF, GDF-Suez, Total, Vinci and Alston shrugged off the loss and gained ground early Monday.

In Tokyo earlier in the day better-than-expected factory output data for November cheered investors.

Nippon Oil surged 4.8 percent and Nippon Mining Holdings leapt 5.4 percent after the Nikkei reported that the two companies would slash their combined oil refinery capacity after a planned merger.

Overcapacity has been a major problem for the sector, so this is definitely a positive, said Tokai Tokyo Research Center analyst Katsumi Hosoi.

Exporters got a boost from the weaker yen while steel makers were lifted by the robust industrial production numbers, which raised optimism about the outlook for demand for their products.

Elsewhere in Asia there were gains of 1.51 percent in Shanghai and 0.63 percent in Singapore. In Hong Kong shares fell 0.17 percent.

On Wall Street traders were reportedly set to close out 2009 on a high note, with markets expected to hold on to solid gains after staging a remarkable turnaround from a chaotic start to the year. -AFP

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